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 Lehfeldt decides that the simple gold standard being familiar to everyone should first be restored to get us out of our present distresses, and that after that we can go on to discuss new devices and improvements.

Regulation by discount rate remains as a third method of controlling the volume of currency, and at present perhaps the most fashionable among reformers—especially those who may be referred to with no intention whatever of disrespect as academic. In this country and in others where legal tender currency is only used in wages payment and retail transactions and as the bankers' cash reserve against deposits, the amount and circulation of "bankers' money"—bank deposits and cheques drawn on them—is evidently a most important influence on prices. When we have all got growing balances at our banks and are constantly turning them over by drawing cheques against them, a rise in prices is certain to happen unless the volume of goods coming forward for sale is growing as fast as the figure of our bank balances.

These bank balances are contained in the deposits held by the banks and it has been shown that these deposits are created by the banks in making advances, discounting bills None